Tanzania's erratic power supply hurts industrial output

The manufacturing sector index since the beginning of general election campaign rallies was on bearish mode reflecting fever and erratic power supply.

The index at Dar es Salaam Stock Exchange that measures industrial share wealth last week registered another drop of 48.68 points early last month to 6,058.45 points. 

Manufacturer sector analysts have it that the nose dive of the industry was to be blamed on two sentiments expecting to have a negative impact.

The Zan Securities Chief Executive Officer, Mr Raphael Masumbuko said the immediacy of erratic power supply impact would not be seen but has negative effect on end year balance sheets.

“The effect of power rationing will definitely low industry output,” Mr Masumbuko said. The CEO urged that since the output envisaged to be low “will affect the return on share and earnings (dividends).”

Mr Masumbuko also said foreign investors normally preferred to invest on manufacturing sector but retained their investment to closely watch election calculation on risks. 

The sector, according to another analyst, is sensitive to erratic power supply since manufacturers incur a number of extra costs to maintain smooth output.

The Confederation of Tanzania Industries, Director for Policy and Research, Mr Hussein Kamote said unstable electrical supply had its toll on manufacturers as it was started to be seen between May and June.

“The sector’s contribution in this quarter (Q3) to GDP will be poor since power supply was rampant, and it is late to reverse the output trend,” Mr Kamote said. 

The sector contribution to GDP decelerated to 6.9 per cent in the Q2 of this year compared to 10.1 per cent of similar period last year.
Source: Daily News, reported from Dar es Salaam, Tanzania
Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.